It’s official: Off-peak use of electricity may cut cost

Home and small-businesses customers served by Central Maine Power Co. can sign up now for a new rate plan that offers lower costs for using electricity at night and on weekends.

The so-called time-of-use plan rewards people who can shift their use of energy-sucking appliances, such as washing machines and clothes dryers, to periods when there’s less demand.

However, it is not clear how many consumers will benefit from the plan or decide to apply. The pricing plan is complex and consumers who don’t do their homework could actually pay more.

How much they can save depends on several factors, including how much electricity they use, and at what times of day.

State regulators say Mainers should take a careful look at how they use electricity now, and be realistic about their ability to change their habits. They also should recognize that time-of-use rates penalize customers who use power between 7 a.m. and 8 p.m. on weekdays, that both time-of-use rates change monthly, and that they are set to rise next winter.

“If you are an average customer and wind up moving in the wrong direction, you could pay more,” said Tom Welch, the PUC chair.

Customers interested in exploring this option are encouraged to request their current usage information using a form on CMP’s website. They can enroll through Jan. 31, either online or by calling CMP.

Dynamic pricing isn’t a new idea for utilities. Large businesses are routinely charged at different rates during various times of the day. But the advent of smart electric meters, and appliances that can be programmed to operate at different times, is making it easier for customers to manage electricity use and costs.

“This puts the consumer in control,” said John Carroll, a CMP spokesman.

Dudley Greeley, an adjunct professor at the University of Southern Maine who teaches sustainable business practices, said increased costs for peak-rate power could help push consumers to change wasteful behavior. Large institutions have been charged fluctuating rates for years and become more efficient as a result, and the same benefits could be reaped at the consumer level, he said.

“When you have more accurate prices, people make better decisions,” Greeley said. “If you don’t want to bother to take advantage of a time-of-use opportunity that might apply to you, you will spend more than you have to.”

Customers who choose the new time-of-use rates must determine whether they will beat the standard offer rate, which is how most Mainers receive their power, or the rates being offered by several competitive energy providers, such as Electricity Maine, Gulf Electricity and Dead River Co.

CMP’s new smart meters record when power is being used, and customers can go to the CMP website to get that information and compare their costs.

The optional “time-of-use” rates are in effect for one year, beginning March 1. They reflect the fact that the cost of power varies throughout the day, and is less during off-peak periods, when demand is lower and fewer generators are needed.

The rates in the new time-of-use plan change each month, while the standard offer rate remains constant for a year, and will be roughly 6.8 cents per kilowatt hour beginning in March.

The time-of-use rate for power consumed from 8 p.m. to 7 a.m. will be 5.2 cents per kilowatt hour in March, or 1.6 cents below the standard offer. But for power used from 7 a.m. to 8 p.m., the rate is higher than the standard offer, at nearly 8 cents.

By February 2014, the off-peak rate is set to rise to roughly 7 cents, and the on-peak rate will be more than 10 cents. That’s because wholesale power producers expect the price of natural gas, used to generate electricity in New England, to rise.

Because of these variables, Welch said, he’s anxious to see how many people are interested in the new time-of-use option.

“We’re not forcing it on anyone,” he said. “We want to see what happens.”

If the current interest in competitive energy providers is any indication, Mainers will change their habits to save money on their electric bills, Carroll said. The growing availability of smart appliances that can automatically vary their consumption, such as programmable air conditioners, will make it easier for customers to take advantage of time-of-use rates, he said.

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